Lessons in resilience from an essential retailer

May 13, 2020

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“You never know what tomorrow will bring.” This saying has never been more relevant. Just a few months ago, none of us could have imagined that a global pandemic would threaten our health and change our daily lives so profoundly.

The reality of rapid response

Those of us in this field have always known how vital supply chains are. They are the lifelines of daily life. In typical times, people in developed economies take supply chains for granted. After all, the machinery behind getting supplies to manufacturers and products to shelves is largely invisible to untrained eyes. In their view, it just happens.

But we know better. We know that the challenges the supply chain community faces today are unprecedented. To protect communities, fuel the economy, and provide essential supplies to everyone from consumers to frontline medical workers, companies have had to pivot supply chain operations from business as usual to rapid response.

It’s the story of our work during this period with a North American retailer. The company sells essential items and has seen off-the-charts spikes in demand for products like canned foods, household cleaners—and you guessed—toilet paper. The domino effect of this demand on every part of the supply chain is extraordinary.

Our team is helping the retailer ensure that promotional products and essential merchandise are available in more than 1,200 stores. We’ve used AI-enabled forecasting, accurate allocation and an automated inbound track-and-trace solution. We’ve also followed a continuous rapid response roadmap to help our client manage through disruption.

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Caption: Supply chain organizations should follow a roadmap to manage through disruption.

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Mobilize: All hands on deck

Almost immediately, we created a crisis response team to establish the right ways of working and decision making processes. We also recognized that rapid response mode would require flexibility. Our team stepped in and focused on some new areas so that the retailer’s supply chain team could double down on others. For example, we took responsibility for ordering all personal protective equipment and sanitation products to deep clean stores and protect the workforce.

Sense: Let the data lead

With this foundation in place, the team assessed the risks and implications of this uncharted environment. It was clear that there was no relying on historical data for demand planning, store allocations and replenishing metrics. Sales patterns had changed overnight. And people were buying larger quantities of products they don’t normally buy, and in some cases, buying less of what they typically buy. The new normal was anything but normal.

Analyze: Expect the unexpected

The team analyzed the impact of demand shifts and supply shortages on the entire value chain with scenario planning. Take plastic bags. Before COVID-19, many eco-conscious shoppers brought recyclable bags to stores. But now they are prohibited from doing this. Without relying on historical data and by resetting algorithms, we got more plastic bags in stock and distribute them across the store network. This is a prime example of human + machine power. Humans understood the “why” behind the demand spike, while machines could source the bags quickly.

Configure: Pivot with change

In our rapid response work with this retailer, we’ve had to take a holistic view of the entire supply network to ensure the company can keep shelves stocked. Re-configuring the transportation network has been critical. Our team had to account for a shortage of drivers, coordinating with vendor transports and warehouses to get critical products to stores. Part of the strategy was fast tracking certain products by changing transport modes from rail to air.

This retailer is focused on immediate concerns—keeping shelves stocked, protecting the workforce and providing consumers with the products and peace of mind we all need right now. The time will come to pivot from rapid response to recovery. In fact, planning has already begun for seasonal products like back-to-school and the holidays.

While it’s true that none of us knows what tomorrow holds, it’s heartening to see what a difference supply chain operations are making today—rising to the challenge of a time like no other. Thank you for your dedication, and please connect with me to share your success stories and lessons learned.

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